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Edward May built a $200-million national Ponzi scheme after he formed E-M Management Co. LLC, in 1997 then formed more than 150 limited liability corporations telling investors that the companies provided telecommunications services to hotels in Nevada, New York, New Jersey, California and around the world.

Man accused of deceiving investors in Ponzi scheme

10/03/09 - A federal grand jury has indicted an Oakland County businessman on 59 felony counts related to an alleged $200-million national Ponzi scheme.

The indictment, unsealed Friday, alleges that in 1997, Edward May formed E-M Management Co. LLC, which was located in rented office space in Lake Orion.

After forming E-M Management, May then formed more than 150 limited liability corporations and told hundreds of people in the Detroit area and across the country that the companies provided telecommunications services to hotels in Nevada, New York, New Jersey, California and around the world, according to the indictment.

"The guaranteed monthly income promised by May to each investment LLC ranged from over $30,000 per month to over $100,000 per month," U.S. Attorney Terrence Berg said in a news release Friday. "May deceived victim investors into believing that their funds were being used and invested as represented, and concealed from victim investors and others the fact that these 'investments' were actually being used to support a pyramid or Ponzi scheme by paying purported investment returns to some investors with funds actually obtained from other investors."

May is charged with 59 counts of mail fraud. If convicted, he faces up to 20 years in prison on each count. He was released on a $10,000 personal bond.

He appeared in U.S. District Court in Detroit on Friday.

The case is being prosecuted by Assistant U.S. Attorneys Stephen Hiyama and Sarah Resnick Cohen.

http://www.freep.com/article/20091003/N ... nzi-scheme

Detroit Man Indicted in $200 Million Ponzi Scheme

Oct. 2, 09 (Bloomberg) -- A 73-year-old Michigan man was indicted on 59 counts of mail fraud in connection with a decade long, $200 million Ponzi scheme that ensnared hundreds of investors across the country, the Justice Department said.

Edward P. May faces as many as 20 years in prison on each count, U.S. Attorney Terrence Berg said in a statement. May was scheduled to appear in federal court in Detroit today.

May is accused of defrauding investors by selling stakes in ventures he falsely claimed had telecommunications contracts with Hilton Worldwide, Sheraton Holding Corp., Hyatt Hotels Corp. and MGM Mirage hotels across the country, according to Berg. May used the money to make payments to earlier investors and enrich himself, Berg said.

“Today’s charges allege a financial fraud and abuse of trust on a massive scale,” Berg said in the statement. “Managers of investor funds owe a high duty to those who trust them to steward their savings with care and integrity.”

May and the investment firm he founded, E-M Management Co., partially settled a U.S. Securities and Exchange Commission lawsuit over the practice in December 2007 without admitting or denying wrongdoing, according to court documents.

Harold Gurewitz, an attorney in Detroit who has represented May and E-M Management, didn’t immediately return a telephone call seeking comment.

The SEC said Sept. 28 it sued a Detroit-area broker for allegedly defrauding elderly investors by selling them interests in ventures run by May and E-M Management.

Fast Frank

Frank Bluestein, 59, allegedly reaped at least $3.8 million for himself and his company, Fast Frank Inc., by encouraging investors to refinance their homes to participate in the Ponzi scheme. Bluestein raised $74 million and was the most successful salesperson for May, the SEC said.

Bluestein falsely told investors he conducted due diligence in E-M, which claimed to have contracts to install and service telecommunications equipment with hotels and casinos in Las Vegas, the SEC said in a complaint filed in federal court in Michigan. Most, if not all, of the purported contracts didn’t exist, the agency said.

The case is U.S. v. May, 09-cr-20482, U.S. District Court, Eastern District of Michigan (Detroit).

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